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New report shows many Scots still 'drowning in debt'

Citizens Advice Scotland (CAS) have said many Scots are still ‘drowning in debt,’ as new figures showed that over half a million Scots have taken on more debt in the last three months – a higher rate than the UK as a whole.

A new report, published by the insolvency trade body R3, finds that:

  • Scots are taking on more debt than people in the rest of Britain.
  • Over the last three months, 539,000 Scots have taken on additional debt, through credit cards, loans, and increased overdraft facilities.
  • This works out at 13 per cent of the Scottish population - higher than the 12 per cent figure across the rest of Britain.
  • More than four in ten Scots (43 per cent) say they struggled to make it to payday. (This accounts for around 1,782,000 Scots).

Responding to the report, CAS Chief Executive Lucy McTernan said,

“Sadly we are not surprised by these figures. The evidence from Scottish CABs has been reporting clearly for some time that debt remains a massive issue.

“Last year Scottish CAB advisers dealt 132,000 debt cases. That’s a quarter of all the cases we dealt with. There are too many Scots who are drowning in debt, and the problem is getting worse.

“The worrying thing is not just the numbers of people in debt, but the extent of the debts they are facing. CAB evidence shows that across Scotland, debt levels increased by 50% over the period of the recession, with the average debt among our clients reaching more than £20,000. The number of young people in debt is particularly worrying. Four out of five young Scots have been in debt by the age of 21, and that a third have owed more than £5,000.

“Over 40% of CAB debt client have told us they have gone without food or fuel in order to try and pay off their debts – in many cases because they were being pressurised aggressively by their creditors.

“It is important that people know help is available. Anyone who is struggling with debt can get free, confidential and impartial advice from their local CAB. But the sooner you confront the issue the better. We understand that its very tempting to stick your head in the sand and ignore those envelopes as they come through the door. But it doesn’t work, unfortunately. It just piles up more and more debt, which you will have to face eventually. Far better to confront it now, and the CAB will help you do that.”

For CAS interviews please contact Tony Hutson on 0131 550 1010.

NB This is the number of the CAS Press Office, for use by journalists only. If you are a member of the public looking for CAB advice please contact your local bureau.

Today’s report is published by the insolvency group R3.